PSC v Mangat Rai: Cheque Bouncing Case Dismissal Quashed

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Page 1 Wednesday, January 19, 2022

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2002 SCC OnLine P&H 702 : (2002) 4 RCR (Cri) 458 : (2002) 2 Ch LR 482
PUNJAB & HARYANA HIGH COURT

BEFORE R.C. KATHURIA, J.
Criminal Revision No. 682 of 2000.

D/d. 27.08.2002.
Punjab State Civil Supplies Corporation Ltd. … Petitioner
Versus
Mangat Rai … Respondents
JUDGMENT
R.C. KATHURIA, J. — Petitioner has invoked the jurisdiction of this Court under
Section 401 of the Code of Criminal Procedure (hereinafter referred to as, ‘the Code’)
seeking quashing of order dated 8.1.2000 passed by the Sub Divisional Magistrate,
Samana whereby the complaint under Section 138 of Negotiable Instruments Act
(Amended), 1988 (hereinafter referred to as, ‘the Act’) read with Section 420 of Penal
Code, 1860 (hereinafter referred to as, ‘IPC’) filed by the petitioner-complainant
against the respondent-accused was dismissed and consequently the accused was
discharged.
Page: 459
2. For adjudication of the present petition, the necessary facts have to be focused
briefly. Punjab State Civil Supplies Corporation, through its District Manager, Smt.
Simarjit Kaur filed the present complaint against Mangat Rai, being the sole proprietor
of M/s Mangat Rai Rice Mills, Ghagga Road, Samana and also against the sole
proprietorship concern M/s Mangat Rai Rice Mills through Mangat Rai, arrayed as
accused Nos. 1 and 2 respectively under Section 138 of the Act and Section 420 IPC.
In the year 1995, complainant had supplied 66423 bags of paddy of custom milling to
Mangat Rai, accused as per the contract entered between the parties. The accused had
done milling of 4378 bags, out of the total 66423 bags of paddy which were supplied
by the complainant. Out of remaining bags of paddy left with the accused for milling,
accused Nos. 1 and 2 purchased 17267 bags of paddy at the rate of 422/- per quintal
plus tax from the complainant in the open Sale Scheme. After physical verification of
the stock, shortage of 18005 bags was found for which accused Nos. 1 and 2 were
responsible. The price of the 18005 bags came to Rs. 48,63137.75. In order to clear
the aforesaid liability, accused issued five cheques Nos. 145131 for Rs. 4 lac, 145137
for Rs. 8 lac, 145128 for Rs. 8 lac, 145135 for Rs. 20 lac and 145132 for Rs. 8 lac. The
cheques were entrusted to the banker of the complainant for encashment, but
Cheques Nos. 145135 and 145132 were dishonoured by the banker of the accused-
Company and an intimation in this regard was received vide memo dated 7.8.1995
wherein it was stated accused was not having, sufficient funds in his account to make
the payment of the cheques issued. Thereafter, the complainant approached the firm
of the accused to discharge his liability but a request was made by the accused to
present the cheques again in the month of October 1955 with the assurance that same
would be encashed and that he would be able to arrange the funds for encashment for
the cheques. Acting on the assurance given by the accused, the cheques were again
presented to the banker of accused-Compay for payment in October 1955 but they
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were returned again with the remarks “Refer to Drawer” on the memo of the bank
dated 11.10.1995. Thereafter a registered notice dated 25.10.1995 was sent to the
accused to make the payment of the cheques within 15 days of the receipt of the
notice but to attention was paid by the accused to the notice. Thereafter the present
complaint had been filed.
3. In support of the allegations made in the complaint, Smt. Simarjit Kaur, District
Manager, CW-1 and Shri Sanjeev Goyal, CW-2 were examined. Complainant also
produced on record documents C-1 to C-12. Taking into account the evidence led in
support of the complaint filed, the learned Magistrate vide order dated 3.8.1996
summoned the petitioner-accused to face trial under Section 138 of the Act. On
appearance before the trial Magistrate, an application was filed by the accused for
discharge and dismissal of the complaint on the ground that notice issued by the
complainant was illegal as it had been issued beyond the period of 15 days prescribed
and the cheques in question were presented twice although cause of action had
accrued to the complainant when cheques were dishonoured by the banker of the
accused on presentation on the first occasion and for that reason, no cognizance
should have been taken by the Magistrate on the complaint filed. The application filed
by the accused was dismissed by the trial Judge on 7.11.1998. Aggrieved by the said
order, accused filed revision and the same came to be dismissed in Criminal Revision
No. 2 of 4.3.1999 by the Additional Sessions Judge, Patiala as per the order dated
15.11.1999. While ordering the return of the record of the trial Court, direction was
given to the parties to appear before the trial Court on 11.12.1999. The file was
received by the Sub Divisional Judicial Magistrate, Samana on 16.12.1999 from the
appellate Court and notice to the parties was ordered to be issued for 8.1.2000. On
that day, none had put in appearance on behalf of the complainant, consequently, the
complaint was dismissed for want of prosecution and the accused was discharged.
Hence the present petition.
4. I heard counsel representing the parties at length.
5. While seeking quashing of the order dated 8.1.2000 passed by the Sub Divisional
Judicial Magistrate, Samana it was strenuously contended by the counsel representing
the petitioner that specific direction was given to the parties by the appellate Court to
appear before the trial Court on 11.12.1999. But on that day, case was not listed in
the cause list and on confirmation by the counsel for the petitioner from the official of
the Court concerned, he was informed that file had not been received from Patiala and
on receiving the file, fresh notice
Page: 460
would be issued to the petitioner. Thereafter no notice was received by the petitioner
regarding the date of hearing fixed in this case 8.1.2000. On 22.1.2000 complainant
as well as his counsel came to know from the Ahlmad of the Court that the present
complaint had been dismissed in default on 8.1.2000 on account of non-appearance of
the petitioner. Under these circumstances, it was urged by him that non-appearance of
the complainant was neither intentional nor wilful as the has no knowledge of the date
of hearing fixed in this case as 8.1.2000 and for that reason, no appearance could be
put in by the petitioner before the Court on that date. Additionally, it was submitted
by him that no meaningful proceeding was to take place on that date and only the
presence of the parties was required to be recorded. Therefore, dismissal of the
complaint by the trial Magistrate was wholly unjustified. It was pointed out that even
if the order dated 8.1.2000 passed by the Sub Divisional Judicial Magistrate is
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construed as an acquittal, this Court has got ample power to treat this petition as an
appeal or this Court can exercise the jurisdiction under Section 482 of the Code or
Article 227 of the Constitution of India so as to correct the illegality committed by the
trial Magistrate in dismissing the case. In support of the stand taken, reliance was
placed on several cases noticed hereinafter. In Duni Chand, Member Panchayat and
others v. Savitri Devi, 1984 (1) RCR (Criminal) 115, it was laid down that where a
revision was filed before the Sessions Court against conviction, the Sessions Court can
treat the revision as an appeal and power vested in the High Court under Section 401
(5) of the Code can be exercised by Sessions Court in view of the provisions contained
in Section 399 of the Code. In Murari Lal v. Madan Lal and others, 1966 (2) Recent
Criminal Reports 657, it was observed that where complaint is dismissed in default,
the petition under Section 482 of the Code challenging the said order of the Magistrate
is maintainable. In Ajay Khurana v. Anil Cloth House through Prop. Sh. Anil Kumar,
1998 (3) RCR (Criminal) 233, the case was fixed for arguments but the complainant
did not appear on the date fixed and the Magistrate dismissed the complaint in
default. While setting aside the order of the Magistrate, it was observed that
Magistrate should have passed the order on merits for summoning the accused or
otherwise and should not have dismissed the complaint in default. In The State of
Haryana v. Mansa Ram, 1973 Crl.L.J. 386, it was observed that amendment of the
proviso to Section 247 of the Code in 1955 has widened the Magistrate's power of
proceeding with the case despite the absence of complainant and this power can be
exercised even in the case of private complaint though no application is made for
dispensing with his attendance and the Magistrate should not dismiss a complaint
merely because of absence of the complainant but must apply his mind as to whether
complainant's attendance can be dispensed with. In that case, the order of acquittal
passed was set aside the case was remanded to the Magistrate to try the case in
accordance with law. In Shiv Kumar v. Mohd. Saghir, 1997 (1) Recent C.R. 709, the
complaint filed under Section 138 of the Act was dismissed in default for non-
appearance of the complainant. While setting aside the order so passed, it was laid
down that complainant and his counsel had been appearing for four years and merely
because the complainant could not put in appearance on one hearing, the complaint
should not have been dismissed in default. It was held that the order so passed by the
Magistrate is not a judicial exercise of discretion vested in him under Section 256 of
the Code. In The Associated Cement Co. Ltd. v. Keshvanand, 1998 (1) RCR (Criminal)
309, the question of dismissal of the complaint in default came under consideration by
the Apex Court and in paras 16 and 17 of the order, it was observed as under-
“16. Reading the section in its entirety would reveal that two constraints are
imposed on the court for exercising the power under the Section. First is, if the
court thinks that in a situation it is proper to adjourn the hearing then the
Magistrate shall not acquit the accused. Second is, when the Magistrate
considers that personal attendance of the complainant is not necessary on that
day the Magistrate has the power to dispense with his attendance and proceed
with the case. When the court notices that the complainant is absent on a
particular day the court must consider whether personal attendance of the
complainant is essential on that day for the progress of the case and also
whether the situation does not justify the case being adjourned the court is
free to dismiss the complaint, acquit the accused. But if the presence of the
complainant on that day was quite unnecessary then resorting to the step of
axing down the complaint may not be a proper exercise of the power envisaged
in the section. The discretion must, therefore, be exercised
Page: 461
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judicially and fairly without impairing the cause of administration of criminal justice.
17. When considering the situation of this case as on 24.8.1996, from the facts
narrated above, we have no manner of doubt that the Magistrate should have
resorted to the axing process, particularly since the complainant was already
examined as a witness in the case besides examining yet another witness for
the prosecution.”
6. In the above mentioned case, the order of the Magistrate acquitting the accused
and that of the High Court maintaining that order, was set aside and it was directed
that the prosecution should proceed from the stage where it had reached before the
order of acquittal had been passed.
7. Counsel representing the respondent while opposing the submission made,
mainly contended before me that the petitioner had deliberately not put in appearance
on 8.1.2000 and thus, the Magistrate was fully justified in dismissing the complaint.
In order to appreciate the submission made, it is necessary to notice the order of the
trial Magistrate passed on 8.1.2000 which reads as under -
“Present:— None for the complainant.
Accused on bail with counsel None, has put in appearance on behalf of the
complainant. Case called several times during the day. It is already 3.30 P.M. I
have exhausted my cause list for today. It appears that the complainant is not
interested in prosecution of the case. The case is legally compoundable as
such, the complaint is ordered to be dismissed in default for want of
prosecution. As accused is on bail. His bail bond and surety given stands
discharged. Record be filed.
Announced 08.01.2000.
Sd/- Sub Divisional Judicial Magistrate,
Samana.”
8. I have already noticed earlier that as per direction of the appellate Court, the
parties were directed to appear before the trial Court on 11.12.1999. On that date, file
was not received by the trial Court. Rather the file was taken up by the trial Magistrate
on 16.12.1999 suo motu when it was received from the appellate Court. Obviously
none of the parties was present on that day and for that reason, notice was issued to
the parties for 8.1.2000. The reading of the impugned order dated 8.1.2000 would
reveal that learned trial Magistrate had nowhere recorded that notice sent in
pursuance to the order dated 16.12.1999 had been served upon the complainant.
Before passing the order, it was duty of the trial Magistrate to have ensured that
notice sent by the Court had been duly served upon the complainant. This duty had
not been discharged by the trial Magistrate. Another reason stated in the order viz the
complainant appears to be not interested in prosecution of the case is not based on
record because it is manifest from the file of the case that complaint was instituted in
the Court of Sub Divisional Judicial Magistrate, Samana on 25.11.1995. The accused
was ordered to be summoned under Section 138 of the Act as per order dated
3.8.1996 and thereafter on appearance of the accused, bail was granted on 14.9.1996.
Thereafter the case came to be posted on several dates. Thereafter the complaint was
dismissed by the trial Court and that order was set aside by the appellate Court. Thus
it cannot be said that the complainant was not serious in pursuing the complaint. The
other reason which influenced the Magistrate to pass the impugned order is that the
offence is compoundable which is not borne out from the provisions of the Act.
Moreover, in Rajneesh Aggarwal v. Amit J. Bhalla, 2001 (1) RCR (Criminal) 606, it was
laid down that even where the accused deposit the cheque amount in Court, it would
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not save the accused and criminal proceedings cannot be quashed. It is clear from the
record that the case was not posted for evidence of the complaintant, rather it was for
appearance of the complainant as well as of the accused on 8.1.2000. Thus, presence
of the complainant was not necessary because the case was not fixed for recording
evidence of the complainant. In the given circumstances, observation made in The
Associated Cement Co. Ltd.'s case (supra) of the Apex Court would apply to the facts
of the present case.
9. The matter relating to the issue raised in the present petition had also come
before me in another case, Sant Lal Bhatia v. City Credit and Leasing Company, Hisar,
2002 (3) RCR
Page: 462
(Criminal) 250, wherein dealing with the issue raised in that petition, it was observed
in paras 8 to 11 under:—
“8. Counsel for the petitioner has stated that the Additional Sessions Judge has
given unjustified reasons in his order dated 7.3.2002 while setting aside order
dated 10.7.2000 passed by the Judicial Magistrate Ist Class, Hisar. It was
contended that the non-availability in law of a remedy of file a fresh complaint
under Section 138 of the Act, is no ground to allow the complainant to
continue the proceeding indefinitely; the complainant was duty bound to
produce evidence in support of the accusations made in the complaint and he
having failed to produce any evidence on the date fixed or put in appearance
without any sufficient cause, the Judicial Magistrate was fully justified to
dismiss the complaint. This fact according to the counsel has been totally
ignored by the learned Additional Sessions Judge. Another legal plea taken by
him is that revision against the order of discharge was not maintainable
because the order of discharge has to be construed as an order of acquittal and
the only remedy available to the complainant was to file an appeal under
Section 378(5) of the Code. In this regard, support was sought from the
observations made in Raja v. State of Maharashtra and another, 2000 (2)
Criminal Court Judgment 88 and Gurdev Singh v. State of Punjab, 1994 (1)
Criminal Court Judgments 582 : 1994 (1) RCR (Crl.) 341 (P&H).
9. There is no quarrel with the proposition of law laid down in the above-
mentioned cases. Manifestly, in this case, criminal complaint came to be filed
by the complainant because the petitioner-accused had failed to honour the
cheque issued by him. Section 138 of the Act was inserted in the Act by the
Banking Public Financial Institutions and Negotiable Instruments Law
(Amendment) Act, 1988 (66 of 1988) which came into force with effect from
1.4.1989. The Parliament in its wisdom had chosen to bring this section on the
statute-book in order to introduce financial discipline in business dealings.
Prior to insertion of Section 138 of the Act, a dishonoured cheque left the
person aggrieved with the only remedy of filing a claim. The object and
purpose of bringing a new provision in the Act was to make the persons
dealing in commercial transactions work with a sence of responsibility and for
that reason, under the amended provisions of law, lapse on their part to
honour their commitment renders the person liable for criminal prosecution.
Therefore, while taking into account the stand taken by the petitioner, the
above object of the enactment of Section 138 of the Act and the circumstances
under which the complainant could not appear when the complaint was
dismissed by the learned Magistrate, as such cannot be ignored. Petitioner has
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placed on record the grounds of revision filed by the respondent while assailing
order dated 10.7.2000 passed by the Judicial Magistrate. It was specifically
stated in the grounds for revision that on 10.7.2000 when the complaint was
dismissed in default, another complaint titled as C.C.L. Co. v. Satbir was also
fixed in the Court of Additional Chief Judicial Magistrate. It was also mentioned
by the complainant that he had appeared on that date in the court of
Additional Chief Judicial Magistrate, Hisar. In addition, it was mentioned by
him that he was present in Court since morning and after attending the court
of Additional Chief Judicial Magistrate, he came back to the court and came to
know that his complaint had been dismissed. He had further stated that the
absence of the complainant was not intentional though the learned Additional
Sessions Judge has not adverted to this explanation.
10. The Judicial Magistrate while acting under Section 256 of the Code has also
take into account that the powers vested have to be exercised in the interest of
justice. In the present case, the Magistrate has not recorded any reason as to why he
did not deem it proper to adjourn the hearing of the case to some other date. The
Magistrate has been specifically empowered to dispense with the personal attendance
of the complainant and proceed with the case. The efforts of the trial Magistrate should
be to dispose of cases on merits instead of dismissing them in default. In this case,
the complainant had been pursuing his complaint from 16.9.1988 onwards and only
on the date fixed i.e. 10.7.2000 he was not present at the time when the case was
called and was present in the court of Additional Chief Judicial Magistrate in another
case. Thus, under the circumstances of the case, the Magistrate was wholly unjustified
in dismissing the complaint for want of prosecution.
11. Coming to the other plea raised by the counsel for the petitioner that order of
the discharge
Page: 463
amounted to acquittal and it could only have been challenged in this Court and that in
the revision petition filed by the respondent the Additional Sessions Judge could not
have set aside order dated 10.7.2000 of the Magistrate, as has been done vide order
dated 7.3.2002 as the revision petition was not maintainable would not stand in the
way of this Court to exercise power vested under Section 482 of the Code to take
correctional measures after order dated 10.7.2000 has come to its notice because
continuance of this order of the Magistrate would cause miscarriage of justice.
Therefore, order of the Magistrate dated 10.7.2000 being illegal has to be set aside
and cannot be upheld as sought to be contended by the counsel for the petitioner. It is
ordered accordingly. The trial Magistrate shall proceed to decide the case on merits.
Petition stands disposed of accordingly.
12. Observation made in the above mentioned case completely covers the stand
taken by the parties before me noticed above. The ratio of the above mentioned order
applies to the facts of the present case. From whatever angle it is examined, the
impugned order dated 8.1.2000 of the learned Magistrate cannot be sustained and the
same is accordingly set aside. The trial Magistrate shall proceed with the case in
accordance with law.
Petition stands disposed of accordingly.
Order accordingly.
———
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Page 1 Wednesday, January 19, 2022

PUNJAB & HARYANA HIGH COURT

Criminal Revision No. 682 of 2000.

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